Mega Aims for Growth with BrandSource Banner
Furniture Today Staff -- Furniture Today, July 19, 2011
Cathy Wall, left, Wall’s Countrywide; Darlene Ziegenhagel, Renaud’s Countrywide; Nöella Bujold, Les Meubles Conrad Boudreau; Ryan Ziegenhagel, Renaud’s Countrywide; Jim and Louise Conlon, Inspiring Interiors by Barton’s; Suzanne Maheu, Maheu Countrywide.
SASKATOON, Saskatchewan - BrandSource will be the primary branded vehicle driving the independent retailers belonging to Mega Group to market, both in-store and online, Mega President Benoit Simard told members attending the Canadian buying group's annual meeting in San Antonio earlier this year.
BrandSource will soon take the place of most of Mega's other remaining banners and networks, including Countrywide, Sleep Experience and Promotional Networks.
Launched in Canada in 2009, BrandSource has 143 members representing an estimated $395 million of retail sales annually. These merchants are supported by a bilingual website and four national sales events, as well as by television and Web-based advertising campaigns.
Currently, about 65 of these stores have dedicated websites "and there will be 100 sites up by the end of 2011," Simard reported, adding that the BrandSource store count is projected to increase to 160 by year's end. That would amount to more than a third of Mega Group's total furniture store membership of 400 to 450.
Simard said Mega has been investing heavily in creating BrandSource in Canada in recent years, believing the concept - which was originated in the United States by the California-based Associated Volume Buyers (AVB) - will give independent furniture and appliance retailers the same level of awareness among consumers as wellknown brands such as Mc- Donald's and Tim Horton's.
"This is the only North American initiative that is dedicated to helping the independent retailer create top-of-mind awareness with their target consumer," Bob Lawrence, CEO of Brand- Source in the U.S., told Mega members attending the San Antonio meeting.
That top-of-mind awareness is the competitive edge retailers need in the modern era, where consumers shop via the Internet long before they set foot in a store, officials said. Furthermore, they said, the independents cannot compete on their own against the advertising budgets employed by the big box national chains. The Brick, for instance, has an ad budget of C$100 million while Leon's spends C$60 million and BMTC another C$55 million.
Lawrence said the big box stores' weakness can be found in their closing rates, which always trend lower than that of an independent retailer. Give a group of independents the advertising clout of a national organization, coupled with their higher closing rate, and the recipe for success has been discovered, he said.
"We are the only (buying) group in North America that has created a brand," Lawrence said. "After branding, our most significant initiative has been the BrandSource website and its e-commerce capability."
He added, "Our research clearly shows that people are in the market for 30 days, that 50% of them shop in only one store and the majority of people shop in no more than two stores.... Eighty percent of all consumers who buy appliances go to the Web before they go to the store."
He said this behavior has evolved quickly - in 2000, only 17% of consumers shopped for appliances online.
BrandSource, he continued, is working with manufacturers in all categories to develop exclusive product lines for its independent retail members on both sides of the border. "After all, we are the only alternative they (the manufacturers) have to promote nationally," he said.
Simard added that 92% of Canadians have access to high speed Internet service, making it critically important for BrandSource to give its members high visibility online.
Currently the network's website at www.brandsource. ca carries a wide range of appliances, mattresses and furniture from a broad number of Canadian manufacturers and importers.
Prices are listed for most of the product, but Simard noted there are still hurdles to be overcome.
The most obvious is that the furniture assortment can vary from store to store - unlike with appliances and mattresses, where a national product assortment is common or available to all member stores.
When someone shopping online is directed from the main site to that of the local BrandSource member, the furniture assortment usually changes somewhat to reflect what's on that retailer's floor.
"We must have a national core program for furniture," Simard said, adding that Mega is currently working with the group's cadre of approved suppliers to have one in place, probably sometime in 2013.
BrandSource will be Mega's "virtual chain of stores" that will give its members the ability to compete in an evolving marketplace, he said.
"We need the majority of the group to move with us in this direction," Simard told the members.
"The consumer is changing a lot of things and this is changing the way we do business. We need to evolve our offering and the power of the group is where you will find the solutions to the problems," he said.
Simard reminded his audience that properly maintaining a website and constantly ensuring that the retailer's product and pricing are upto- date are hugely expensive undertakings. Pooling those resources into the common BrandSource website is the most affordable option, he said.
"You have to keep on top of it all the time, you have to be fresh, you have to have your promotions and you have to get the search engines to put you at the top of the list," he said. "On the Web, you can be as big, as powerful, as good and as exciting as any of the majors."
In a world where shopping happens 24 hours a day, seven days a week, Simard said independent retailers need to be available to the customer whenever she chooses.
"Soon, 200 stores across Canada will get together. They will be linked on one website, where they will represent all of the major brands - they will be part of the virtual store," he said. "Because this way we'll be able to give the consumer what she wants, when she wants it.
"This will definitely make a difference in the Canadian market."
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2 Canadian banners to convert to BrandSource
Jan 25, 2012 -
Canada's Dufresne group working to add members
Feb 1, 2011 -
Buying Groups Get Busy
Jan 13, 2011 -
Mega Group adding furniture to Canadian website
Jul 19, 2010
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